Jake Challenor
Publisher & Editor

OPINION: What is ARN thinking?

Is there a pot of gold at rainbow’s end for Australian Radio Network?

ARN’s puzzling decision to axe its #1 breakfast show at Gold 104.3 Melbourne this week left many in radio scratching their head in search of any rational reasoning behind the decision.

Survey seven delivered in spades for the Melbourne Pure Gold station. It drew a cume of 997,000 and a double-digit score of 11.1% of people 10+. Not to be sneezed at. Across all GfK surveys in 2017, Gold 104.3 has averaged about 8.9% to smoothfm’s 9.7%.

The strong results, it should be pointed out, also follow the recent departure of ARN’s Melbourne-based content director, Sam Thompson. She was a much-loved and highly respected industry executive.

Talking to people in the radio business, it’s clear that ARN is, in recent times at least, best known for two things; hiring Kyle & Jackie O and, in very close second, its questionable “parting ways” with talent at unusual intervals and under dubious circumstances.

The dearly departed reads like a gender-imbalanced who’s who of radio. Grubby & Deedee, Brigitte Duclos, Chrissie Swan, Jane Hall, Matt & Meshel, Hughesy & Kate, Thinkergirls, Robyn Bailey and now, Jo & Lehmo, officially got the boot this week. The pair just scored their highest ratings in over a decade – 8.4% put them at #1 with an average 7.2% of people 10+ between survey one and survey seven this year.

Champagne was flowing one week and tears the next. Radio can be a brutal business. The reaction on social media from listeners and the talent, says plenty as to the shockwaves that followed the announcement.

Lehmo’s departure, first scooped by Radio Today two weeks ago, is undeniably the head-turning story of the month, somewhat reminiscent of 2Day FM losing Kyle and Jackie O. Although, admittedly, Jo & Lehmo’s departure won’t have anywhere near the same impact.

It begs the question: Why would a top-rated station let its top-rated talent walk out the studio door, and not look back? It just makes no sense. Or did the talent, and their management, simply want too much money?

The station won’t completely collapse in ratings post-Jo and Lehmo. However, you would think breakfast and Gold could lose a few points, potentially placing it back in the pack, behind KIIS, Triple M and Nova with a return to single digits.

Unless, of course, there is some method to the madness. A pot of gold at the end of the rainbow, if you will. And if this is indeed the case, what’s the strategy in play? How will this round of high-stakes chess play out?

As group content director Duncan Campbell told Radio Today just last week, “Any decisions [ARN] make, we make for specific reasons with a medium to long-term strategic view.”

One likely possibility is the move from a ‘talent-driven’ station to that of a ‘more music’ format, putting Gold 104.3 firmly in a two horse race with NOVA Entertainment’s equally popular smoothfm. The two radio stations have been battling a firm tug of war in the GfK ratings all year.

Maybe ARN plans to allocate the money it saves on talent and dish it out on marketing instead. Or perhaps ARN is just looking to cut further costs following last year’s financial results. Investment in talent and digital assets increased ARN’s costs by $4.5m for the six months ending June 30 2017. In the same period, revenue generated by ARN was down 6%.

One real probability gaining steam throughout media circles is that Sydney’s Jonesy & Amanda will pipe into Melbourne with some locally skewed content. Just the thought of this may send shivers down your spine – it breaks the golden rule of breakfast radio – staying local. The networks have very successfully networked drive shows but it remains to be seen if breakfast can cross state lines. Triple M tried and failed with Richard Stubbs in 90’s.

Overnight Campbell has quashed any such speculations, tellings the Sydney Morning Herald, “No discussions have taken place regarding the syndication of Jonesy and Amanda into Melbourne.”

But if it were to happen, it would be interesting to hear how ARN tackle the challenge of localism, especially in a football-mad town like Melbourne.

You may recall that Jonesy & Amanda recently inked a new deal with ARN. Some sources tell Radio Today the pair received an increase in salary, offering more weight to the idea that Melbourne may get it’s cornflakes and laughs delivered from Sydney. At the very least, they may be looking to amortise Jonesy & Amanda across two metro markets.

With the recent PR push around Jonesy’s new book and Amanda’s national profile from her TV commitments, it’s a real option for ARN. How would it go?

Bypassing the apparent obstacle of local content in breakfast, the next item on the agenda would be to address the branding of WSFM 101.7 Sydney and Gold 104.3 Melbourne, to unify the stations for any planned networking.

Is it possible the Sydney station – with deep heritage roots in Western Sydney – will finally get a rebranding to become Gold 101.7 Sydney? ARN did renew the domain name Gold1017.com.au in July this year. But, at this point, who really knows?

If we’ve learned anything this week, it’s that nothing is off of the table – even when you are #1 at breakfast.

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Recent comments (12)
Whois
22 Nov 2017 - 6:55 am

Good article Jake – like it.

Bob
22 Nov 2017 - 9:00 am

Good read Jake great insight.

Strategy King
22 Nov 2017 - 11:11 am

Great article – and that graph makes Duncan’s decision all the more confusing. Jo & Lehmo were continuing to build share, book after book. Below station average sure – but show me an FM breakfast show that isn’t, rating an 8.4 in breakfast is not the same thing as rating 8.4 across the day (look at cume graph, drops off a cliff after 9am)

You were shafted because of bad strategy Jo & Lehmo – no two ways about it

Craig
22 Nov 2017 - 12:01 pm

Sounds like its got nothing to do with Duncan more to do with the new ARN CEO flexing his muscle and saving money.

Paul
22 Nov 2017 - 12:29 pm

Rumour has it Mix Adelaide Breakfast will be next to get the chop… maybe even this week.
Got to wonder what is going on at ARN.

Choo Choo Train
22 Nov 2017 - 12:54 pm

The appointment of Kyle and Jackie O involved the reorganising of the station’s music, branding, imaging, programming etc., to take advantage of tactical opportunity. This case fits what the great marketing critics Al Ries and Jack Trout wrote about ‘tactics driving strategy’ or ‘bottom-up marketing’. I doubt the parade of ARN arrivals and departures, both personnel and rebrands, fit that description. As long as you can validly debate ‘what drives what”(strategy versus tactics), it’s equally valid to suggest that it may not be a pot of gold at the end of a rainbow, rather the light at the end of a tunnel being a train wreck. Don’t mean to sound overly critical but any defense of ‘long term strategy’ wears thin when we are talking about ARN. The truth is they have as mixed bunch of performers and non-performers as any network and a as mixed record of giving due credit as any other. Giving Jo and Lehmo their marching orders at this time sends a chilling signal to the industry and we all feel that.

Wendy
22 Nov 2017 - 1:11 pm

No need to post comment, but some feedback below.

Great article, fantastic read and points.

Would have appreciated the same insight to the nova changes last month though.

Perhaps that story could be revisited with a focus on radio announcing jobs in Australia and what it means for the industry. I feel it was brushed off with only half the story.

Perhaps a progress report how is the networking sounding? How is it working? What’s the process?

Thank you.

Neil Docherty
22 Nov 2017 - 1:52 pm

Great article Jake, I beleive they would not make such a decision without thoroughly doing research and modelling as to where the Gold breakfast would sit in the landscape in twelve months.
I remember commenting on the first Hit station in Australia (SAFM), and how SCA would roll the Hit brand out across Australia….I was bagged for my comments, however a solid business decision was made and the roll out began.
ARN will have a local well researched breakfast team already in place just waiting to be released from their shackles…..lets hope its not John Laws and Kerry Anne

to be fair...
22 Nov 2017 - 2:41 pm

Grubby and Dee Dee were moved along so Lehmo could join GOLD Brekky! We can’t simultaneously be angry at ARN both can we?

The Evening News
22 Nov 2017 - 3:37 pm

I mean, sure if you look at the procession of experienced names that have been given the flick it looks, well, strange I guess.

But overall, a large majority of those that are no longer there were either not rating, inappropriate for the station or both. They’re all great talent, but executing a strategy for a radio station may require adjustment of talent.

Obviously the decision to can Jo & Lehmo was made weeks ago, and their survey result was more a matter of bad timing (or maybe.. karma..?).

I don’t disagree that it’s sad, but where was the outrage and opinion pieces when Nova canned their Melbourne workday announcers? When they canned their Brisbane and Adelaide morning announcers and Adelaide PD AND production people and other assorted staff… If you want to looks at the talent that Nova have canned over the past few years it is also an extensive list.

How is it all that different to the procession of talent 2DAY has had through the doors over the past few years? Again, another extensive list just at the one station.

Grubby & Deedee’s departure was six years ago. Nova 100 has seen three breakfast teams in that time. A little perspective would be nice. Although I know it’s sexier to be salacious.

I wouldn’t have thought that any group program manager in Australia is making decisions without being backed up by research and a strategic plan. It may not be the best thing to do, and it may not be agreed with by many radio people. But to suggest that Duncan Campbell has lost the plot is a bit… well naiive really.

Craig
23 Nov 2017 - 1:50 am

Duncan loves being in the press it seems. Enjoys the attention.

PJC
23 Nov 2017 - 1:41 pm

This is yet another ‘own goal’ by ARN. They have a history of dumping Melbourne Breakfast show talent as soon as they hit #1 in the ratings. You cannot compare what ARN are doing here with what Nova and SCA have done.

I’m sure ARN also relied on ‘research’ when they were putting together their strategic plan to create the KIIS Network. The research and strategy went like this ‘get Kyle and Jackie O and then ask them to create a station around themselves. Now replicate across the Mix Network (now KIIS Network) to get mileage out of the horrendous sum we’re paying them’. This well researched strategy has never worked in Melbourne and nearly killed Perth (which they will finally kill off properly next year just as the station is starting to recover). As for what they’re planning on doing to Gold 104.3, it can’t be good (maybe they’re planning to re-brand it WSFM 104.3 – I’m sure the research from Sydney says it’s a great idea). They just don’t get it at ARN.

In terms of SCA; yes, they’ve also had a ‘procession of talent’ pass through 2Day FM’s revolving doors, but the difference was that the shows were not rating at all, and SCA were/are looking for a silver bullet to fix their post K&J issues. Hopefully they’re starting to grasp that only time can fix that, not necessarily the talent.

As for the Nova changes, they’re executing a similar strategy that many have been doing in regional radio for years. They’ve turned Sydney into the hub and pumping everything out nationally from there. Of course this is terrible for proper localism and for radio jobs, but considering who ultimately owns that network, the cost-cutting ethos is hardly surprising. Just look at what he did to a certain metro TV network he once ran.

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